Expect Weakness for the U.S. Dollar Ahead
A closer look at the DXY suggests that the U.S. dollar will be joining the growing list of struggling global currencies.
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I try to read a lot of opinions about the markets, both technical and fundamental. I consider macro views to be especially valuable and they get me to look for turning points.
Some macro voices claim that governments have destroyed all currencies. You could say that this is just the thinking of the "gloom and doom" analysts, but it gives me pause and I want to focus on the U.S. Dollar Index (DXY) to dive in.
In this daily bar chart of the DXY below, I can see that prices have declined below the negatively-sloped 50-day moving average line and below the negatively-sloped 200-day moving average line. The Moving Average Convergence Divergence (MACD) oscillator has fallen below the zero line for a sell signal.
In this weekly Japanese candlestick chart of the DXY below, I can see that prices have made a very long sideways pattern. Currently, the DXY is below the 40-week moving average line and the MACD oscillator is weakening.
In this daily Point and Figure chart of the DXY below, it looks that a trade at 102.90 or lower will weaken this chart.
In this weekly Point and Figure chart of the DXY below, it looks like a decline to 100.04 or lower will weaken this longer-term chart.
Bottom line strategy: A number of global currencies have been weakening and now it looks like it's the turn of the U.S. dollar. Ashes, ashes... you know how that nursery rhyme ends.
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